June 2015

06/16/2015

The Giving Pledge emphasizes that it’s a moral pledge. This distinction has a very real legal purpose: it eliminates the ability of Giving Pledge signers to sue fellow billionaires who fail to give, according to David Scott Sloan, an attorney and national head of the estate law practice at Holland & Knight.

Bill Gates and Warren Buffet created a document, the Giving Pledge, that billionaires could sign pledging to give away at least half of their wealth either during their lifetimes or in their estate plans.

The Giving Pledge started with a simple idea: the incredibly wealthy should give their wealth to charitable causes instead of hoarding it in their families.

To date, nearly 200 billionaires have signed up and as a result received publicity and invitations to exclusive events.

The first is that if someone does not go through with the pledge, no one can sue the estate in an attempt to enforce the pledge. This is important because of the second good reason to make the pledge non-binding, which is that it is very difficult to determine what half of a billionaire's fortune actually is.

For example, if someone has precisely one billion dollars, you might think that half is $500 million. In reality, it is $300 million because 40% of the estate will go to pay estate taxes meaning that the estate is really only $600 million not $1 billion.

If you are a billionaire, be sure to consult your estate planning attorney before signing this or any other such pledge.

06/15/2015

The desk-calendar entry for 11:30 a.m. on July 3, 1973, reads simply, “Watergate meeting.” It wouldn’t be of much importance except for the author of the hand-written note: former Washington Post editor Benjamin C. Bradlee, who was then deep in the midst of directing the newspaper’s coverage of a scandal that would eventually bring down a president. The calendar is one of thousands of items — memos, photos and correspondence with journalists and dignitaries — that Bradlee’s estate has agreed to donate to the University of Texas’s Harry Ransom Center, a massive humanities archive.

Ben Bradlee was the longtime editor of the Washington Post and best known for his role in breaking the Watergate scandal for which he was portrayed by Jason Robards in the film All the President's Men. Robards won an Oscar for the role.

In 2003 the reporters, Bob Woodward and Carl Bernstein, sold their personal papers concerning Watergate to the University of Texas' Harry Ransom Center, a humanities archive, for $5 million.

It has now been announced that Bradlee's estate agreed to donate his papers to the center.

Bradlee did not have a personal connection to the University of Texas, but he wanted all of the Watergate papers to be located in the same place for researchers.

His estate's donation accomplishes that goal, which explains why such valuable items were donated rather than sold.

The papers also contain other interesting items including a letter from Jackie Kennedy Onassis a month after JFK's assassination, a letter in Spanish from Fidel Castro and a letter from then sitting President Jimmy Carter.

The papers will be made available to the public and researchers once they are cataloged.

06/12/2015

As Gina Rinehart now knows, you cannot operate trusts solely out of your own self-interest when others are involved, even if you are the richest person in Australia.

How do you become the richest person in Australia with a net value of over $12 billion? By leading the charge of Hancock Prospecting, one of the world’s largest iron ore mining outfits and maintaining a family trust from your grandfather worth over $3 billion, like Gina Rinehart.

The mother of four children was sued over the trust by two of those children in 2011.

The controversy started when Rinehart changed a vesting option on the trust from 2011 to 2068.

Now, a judge in New South Wales has ruled that Rinehart cannot be trusted to operate the trust reasonably and has appointed a daughter, Bianca Rinehart, to oversee the trust.

What this case shows is that it does not matter how wealthy you are. If you have control of a trust in which other people have an interest, you cannot operate the trust solely out of your own self-interest.

Trusts must be operated in the interests of all beneficiaries.

If you serve as a trustee, it would be a good idea to seek the advice of an estate planning attorney to make certain that you are managing the trust appropriately.

As Gina Rinehart learned, being wealthy does not give you license to mismanage a trust.

06/11/2015

A more precise estate plan may have saved the family of Robin Williams from their last round of court appearances to finally settle the late actor’s estate.

At first it seemed that, after Robin Williams' suicide, his estate was properly in order to be clearly distributed to his family without controversy. But during that process, a few questions arose that were not explicitly answered within his estate plan. His widow and children could not agree.

As you may recall, his children were to receive the bulk of the estate, but his widow was left a house and money to maintain the home during her lifetime. That left the parties free to argue over whether certain personal effects of Williams' that were left in the home given to the widow should go to the widow or the children.

This is a battle that probably could have been avoided if Williams had been more precise in his estate plan. For example, he could have left money in a trust that his widow could use for necessary expenses for the home, such as maintenance and property taxes, with the remainder of the trust going to the children.

When planning your estate, details matter. Consult with an experienced estate planning attorney to help you cover all of the bases.

Many other states are currently debating eliminating their own estate taxes.

It is becoming clear that, at least at the state level, the estate tax does little to help the finances of the government. However, because the estate tax is always a hot button political issue for reasons other than government revenue, proposals to eliminate it often face uphill battles.

Thus, if your state has an estate tax that you would like to see eliminated, it would be a good idea to contact your state representative to let him or her know your opinion.

06/09/2015

The conversation isn’t fast or fun. But, waiting until it is too late or not keeping an up-to-date estate plan will likely cause more pain later.

No one wants to think about that inevitable day, whether it’s when you or someone you love will pass away. Even in the best of circumstances, emotions like fear and sadness can seem overwhelming.

This, in turn, then causes people to put off estate planning, often until it is too late.

Forbes recently published an interesting article titled "Don't Let Emotions Sabotage Your Estate Plan." The main gist of the article is that people often get emotional about issues surrounding death and end of life planning.

As the title of the article counsels this response is best avoided.

It is necessary to set aside any emotions or unease surrounding death so that you can adequately plan for your estate. As the article suggests, it often takes six months to two years to formulate a complete estate plan, depending on the size of the anticipated estate.

Accordingly, if you have a large estate, you cannot wait until you are near death to make plans.

Another piece of solid advice in the article is that you should revisit your estate plan every three years.

That does not mean that you have to go through the entire process again. It just means that you should sit down with your estate planning attorney and go over everything.

Make sure that no laws have changed that might affect your estate. Make sure that beneficiaries, trustees and executors are still appropriate.

In other words, every three years you should make sure that the estate plan still does what you want it to do. Doing that periodically will possibly save a lot of trouble for your estate.

Why not contact your estate planning attorney and schedule a full review if you are due?

06/08/2015

Although he later returned to work for his father after it failed, Oscar de la Renta’s son Moises attempted his own fashion line and not only seriously severed their relationship, but also his share in the will.

He may have been best known for creating celebrity red carpet ensembles, but Oscar de la Renta also contributed to charitable causes in the Dominican Republic, from where he also adopted a son after the loss of his first wife. The apple did not fall far from the tree. Moises followed his father’s footsteps into fashion as one of his designers.

However, a decade ago, Moises decided to strike out on his own and start his own fashion line for women. The line never took off and Oscar de la Renta publicly criticized his son for the move.

The younger de la Renta eventually went back to work for his father's studio. It appears that the wounds were never completely healed over, as Oscar de la Renta, who passed away in October 2014, has given the son only a very small portion of his $26 million estate.

The majority of the estate will instead go to his second wife.

Language in the will also created a no contest clause that states the son is to get nothing if he ever challenges the will.

It should be noted that, even though the will contains a no contest clause, this is not necessarily the end of the story. Courts have been loath to uphold the clauses if a good reason exists for challenging a will and the challenge is made in good faith.

Whether or not Moises de la Renta does want to challenge his father's will remains to be seen.

An experienced estate planning attorney can help you protect your estate plan from potential beneficiary challenges, but great care must be taken.

06/04/2015

The estranged husband of a Scranton homicide victim is fighting a judge’s ruling that bars him from receiving any part of her estate based on claims he “deserted” her prior to her death. Donald Talerico of Scranton argued that although he and the victim, Kathleen Talerico, were separated, their divorce was never finalized. That entitles him to a share of her estate, valued at about $165,000, according to court records.

If divorcing, it is important to follow through on proceedings and to update your estate plan. If not, your estranged spouse could go after your estate.

When Kathleen Talerico filed for divorce, she and her husband separated. For three years, Talerico did not follow up on the divorce. Both she and her husband had affairs with other people.

Nevertheless, as is common with many on-again-off-again marital relationships, they remained in each other's lives and talked often.

One night while out at a party, Talerico's boyfriend beat her severely enough to cause internal bleeding in her brain.

She later died at home.

Because she was still married at the time of her death, Talerico’s husband would ordinarily have a right to a portion of her estate. However, as they had been separated a judge found that her husband willfully neglected the marriage and thus was not entitled to a portion of the estate.

What remains unclear about this story is what Talerico herself would have wanted.

Would she have wanted her husband to have a share of her estate?

We will never know for two reasons: First, Talerico did not follow through with the divorce proceedings and, second, in the absence of following through with the divorce she could have made her wishes clear in a properly prepared estate plan.

What this case demonstrates is the benefit to updating your estate plan when you file for divorce.

An experienced estate planning attorney can work in close coordination with your divorce attorney to make sure all of the bases are covered.

06/03/2015

A lawyer representing a group of BB King’s heirs said on Saturday they would challenge the blues legend’s will and the actions of his longtime business manager-turned-executor of his affairs.

Prior to his passing, King's family and his business manager were already involved in a legal dispute that was thrown out of court. Thus, it comes as no surprise that the feud would continue after King's death.

Since BB King passed away there have already been accusations that he did not die of natural causes – that he was instead poisoned. However, the coroner has stated that there is no immediate evidence of that claim.

Just hours before his memorial service, an attorney representing King's heirs announced that they would challenge his will and the actions of the business manager.

The manager stands accused of misappropriating millions of dollars, exercising undue influence and being unfit to act as King's executor.